How the Tax Credit Will Affect Small Business

The healthcare reform bill offers tax credits to small business to help offset the cost of insurance premiums. A business that covers at least 50% of employee health benefits, has 25 employees or fewer, and with individual wages less than $50,000 will be eligible to claim up to a 35% tax credit from the 2010 taxation year to 2013. It increases to 50% for taxation years 2014 to 2016. There are roughly 4 million U.S. small businesses that are eligible for the tax credit.

According to my calculations, the healthcare tax credit will have little to no affect on most businesses bottom line. If a company chooses to offer health benefits to employees, the credit will offset some of the costs involved. It may, however, increase employee morale and productivity. That alone makes the health benefits issue worthy of review.

Will the Small Business Exemption Stop a Company from Growing

Small businesses that are looking for growth opportunities will now have to consider healthcare costs before making such a move. If growth means exceeding the 50 employee threshold, losing the exemption in the process, then they will have to either offer health benefits or pay a $2,000 per employee penalty. In some cases, it may be more beneficial to stay small and forego growth. An alternative is to hold a number of companies that stay under the 50 employee threshold thereby retaining the exemption for each company.

In addition, by 2013 there will be a 3.8% income tax on unearned income for wealthy individuals to help pay for healthcare reform. This could have a negative effect on small business investors. Many small companies would not be able to survive without wealthy investors. If an investor deems his ROI to be insufficient after taxes, they may just pull up their stakes and move their money elsewhere.

There are many implications for small business to consider regarding healthcare reform. I’ll continue to keep you posted as more details become available.

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• Resume or Job application
• Federal and State Tax Forms
• Employment Eligibility Form, (I-9)

Resumes/Job Application

Having a resume or a job application on file is not a legal requirement, but a best business practice as it will be important to have a record of your employees’ experience for the job that they were hired for.

Federal and State Tax Forms

Employers are required to submit federal tax forms to the Internal Revenue Service for employees on the staff payroll.  State tax form requirements vary from state to state.  To learn more about federal tax form requirements go to IRS.gov.

A handy site to review and download federal tax forms is Forms.gov.

The Federation of Tax Administrators, (FTA) is a great resource if you are looking for downloadable state tax forms for your specific state.

Employment Eligibility Form, (I-9)

Employers are required to verify that al employees hired in the U.S. are eligible to work in this country.  The I-9 form meets this federal requirement by requiring employers to obtain verification of citizenship by asking new hires to provide specific documents like a U.S. passport.  Learn more about these requirements and download the I-9 form at Forms.gov .

Depending on your business, there may be additional forms that you may choose to create that are specific to your company which will enhance your record keeping and employee tracking goals:

• Direct Deposit Forms
• New Employee Orientation/On-boarding Checklist
• Confidentiality or Conflict of Interest Agreement
• Performance Review Form

Don’t get overwhelmed by the idea that  having a variety of forms will make your business more of a bureaucracy by adding forms that you don’t need.  Start with the basics and only add additional forms if it makes sense for your business.

Dianne Shaddock is the Founder of Easy Small Business HR.com, a website which provides “Quick and Simple Human Resources Strategies for Small Businesses, Non Profits, and Entrepreneurs.

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Keep internet use productive. Photo courtesy of FreeDigitalPhotos.com.

Productivity and company image are two things that could suffer without limits

For all of the benefits that the internet and social media bring to our professional and personal lives, the increased access and visibility also bring a whole new set of problems, particularly for employers.

It’s now commonplace for businesses to prohibit employee access to Web sites with certain types of content. These might include popular social networking Web sites, such as Facebook and Twitter.

Certainly, the employers who take such measures want to prevent reduced productivity. But, it can also prevent disgruntled employees from posting information about the business online.

Prevent bad publicity

How do you stop this type of behavior? Implement employee policies that ban the personal use of the internet during work hours and block social networking sites. In addition, prohibit the use of any of the company’s facilities or materials in videos that will appear on employees’ personal sites.

Rely on HR for proper policies

Consult an experienced human resources professional to institute employee internet-use policies. Not only do you have to draw up adequate rules, but you’ll also need an implementation strategy.

Don’t attempt to do this on your own. If the language doesn’t precisely address the situation, it creates a loophole that does not allow companies to remedy internet-use violations. That’s why you need a human resources consultant.

Procedures that limit internet and social media use by employees at work helps everyone enjoy the good that internet accessibility brings, rather than the bad.

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Hiring & Retaining For Employee Diversity: What You Should Know

Many managers and business owners understand the value of hiring a diverse group of employees, but aren’t quite sure of the steps that need to be taken towards reaching their goal of an inclusive and diverse workforce.

Finding and retaining employees that represent a wide range of diversity at all levels takes time and commitment.  The following 8 tips should help towards developing a plan of action that over time, will help you to hire and retain staff that are representative of the community at large.

Finding Diverse Employees

1. Participate with associations or organizations whose primary focus is to work with underrepresented individuals.  Participation may include attending networking events, sponsoring an association initiative, or providing helpful workshops or information sessions.

2. Take a look at your website and other marketing materials that represent your company.  If these materials don’t highlight individuals from different backgrounds, you’ll likely lose many potential candidates who will view the lack of diversity in your marketing materials to be indicative of the lack of commitment or interest that your business has for staff that are different.

3. Reach diverse candidates early in the game by contacting administrators at high schools or middle schools in areas where the population is diverse.  These types of events are the perfect opportunity to showcase your company and the type of work that your employees perform on a daily basis.  Students will remember your company when they are looking for work.

Retention: Keeping the Employees That You Have

4. Make sure that you orient all new employees by ensuring that they are introduced to staff across the organization.  Share with them the often overlooked, but important information on the mission and culture of the business.

5. Include your new employees in workplace activities and initiatives as appropriate.

6. Become more in tune to cultural and communication differences in the workplace.   Research the impact that cultural and communication differences may have in the workplace.

An excellent article that goes into very interesting detail about cultural differences in the workplace and how to identify an overcome them is “Managing a Multicultural Workforce”.

Another great article to read is “Understanding Cultural Differences in the Workplace”.  Although the article specifically speaks to international business, the advice is very transferable to the U.S. workforce.

7. Don’t be shy about interviewing all of your employees in order to get a sense of what they like about the organization, or what they feel can be done better.  As employees leave your company, meet with them to learn about their experience and use the information to help you to recruit and retain employees.

8. Provide mentorship opportunities for employees so that they are exposed to individuals at all levels of the organization.

Do you have any tips based on personal experience for hiring and retaining a diverse staff?  Share your comments.

Dianne Shaddock is the Founder of Easy Small Business HR.com, a website which provides “Quick and Simple Human Resources Strategies for Small Businesses, Non Profits, and Entrepreneurs.  Go to EasySmallBusinessHR.com for more tips on how to hire and manage your staff more effectively.

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1.) Assess your workplace to determine your human resource and risk management needs. (See What Is A PEO for more info)

2.) Meet the people who will be serving you in order to be sure the PEO is capable of meeting your goals.

3.) Ask for client and professional references.

4.) Check to see if the company is a member of NAPEO, the national trade association of the PEO industry. Click here to visit NAPEO’s Directory of PEO Members.

5.) Investigate the company’s administrative and management expertise and competence. What experience and depth does their internal staff have? Does the PEO corporate staffing allocation follow the priorities of the PEO’s marketed services? Does their senior staff have professional training or designations?

6.) Understand how the employee benefits are tailored and how the employee benefits are funded. Determine if they fit the needs of you and your employees. Is the PEO fully insured, self-funded or partially self-funded?

7.) What is the full breadth of services offered and what type of education structure is in place?

8.) Review the service agreement carefully. Are the respective parties’ responsibilities and liabilities clearly laid out? What guarantees are provided? What provisions permit you or the PEO to cancel the terms of the contract?

9.) Make sure that the company you are considering meets all state requirements.

How to Select an HR Firm for Small Businesses

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Want more productivity? Let employees telecommute. Image courtesy of freedigitalphotos.net.

It makes sense—especially in jobs that require little supervision Staff meetings aren’t a problem for telecommuters with Skype, which allows face-to-face interaction, even remotely. Or, you can choose old fashioned teleconferencing to keep employees in touch with your office.

Numerous Benefits

Needless to say, there are many benefits to telecommuting to employees, their employer and to our environment. With fewer cars on the road, the impact on limited natural resources is lessened, and fewer impurities are being spewed into our atmosphere.

And, employee satisfaction extends beyond jobs. Working from home creates a greater connection to families. Happier employees mean a more positive workplace and better interactions with fellow employees.

The two biggest benefits for employers are staff productivity and cost containment.

Addressing Reluctance

The reasons that businesses have for not adopting telecommuting are varied—but generally, it has to do with the inability to monitor employees and a perception that employees will not live up to their responsibilities without supervision.

In fact, I generally recommend that telecommuting employees are extroverts who require interaction rather than an introvert. This helps guarantee that the at-home employee will reach out to stay in contact with your office.

In a 2008 survey of 212 IT Managers report that 67% of the managers report improved productivity and 59% say that they saved money. Other benefits include access to more qualified staff and ability to retain employees.

There may be a need to improve secure access to shared servers and to monitor productivity. But, the benefits far outweigh the initial costs.

As companies look at decreasing overhead costs and improving employee productivity, many will realize that telecommuting is a viable option.

Telecommuters Need HR, Too

If you have staff working from home, your human resources manager knows that federal regulations apply to your telecommuters, just like your in-office. This means extra diligence is required to ensure that your off-campus employees are aware of required standards and rights.

If you don’t have a human resources staff, outsourcing your human resources duties is important to make sure you’re following federal regulations. This will allow you to take full advantage of the benefits of telecommuting, while ensuring you can remain compliant to federal rules without hiring a full-time human resources expert.

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Take steps to protect yourself from retaliation suits, (Image courtesy of freedigitalphotos.net)

Media reports say that retaliation lawsuits are on the rise. Employers should be concerned because juries tend not to believe businesses because of the rash of corporate crimes that have occurred in the past few years—Enron for example.

Don’t panic about retaliation lawsuits. Instead, take steps to protect yourself against claims before they become a drain on your internal resources and bottom line.

What is a retaliation law suit?

Simply put, an employee may file a complaint against an employer for an EEOC, sexual or other types of harassment/discrimination. If treatment of the complaining employee negatively changes in response to notification, the employee may have grounds for a retaliation suit.

There are things you can do to help protect your company against these types of law suits.

Post policies and stick to them

Make certain that managers and employees are aware that you are an equal opportunity employer and have policies against sexual and other forms of harassment or discrimination. This means that everyone must be trained on these policies, what they mean and how they are enforced in the workplace.

One of the policies you should have is a non-retaliation policy and agreement for employees. At the time of hire, require new employees to sign the agreement. In the policy, describe how the company enforces equal opportunity and prevent offenses like sexual harassment

Policies should be in employee and manager handbooks, posted in prominent areas in the work place and should be part of employee training.

How does a suit come about?

Current law states that these employees have the right to remain on staff. These employees must be treated as any other employee. Make certain your managers understand and adhere to this law.

If the complaining employee believes that he or she is being treated differently since the complaint, they may respond by bringing a retaliation suit.

Human Resources can help

If you’re currently working with a payroll service, realize that they can not help in this situation unless they have human resources experts available to you.

When it comes to employee retaliation, make sure that you have expertise on your side. A human resources specialist will be able to ensure that the language in policies will protect you, that your communications techniques are correct so that you are as protected as you can be about future retaliation law suits.

And, when complaints are brought against other employees, managers or the company as a whole, then a human resources expert can gather information without prejudice and help an employer determine if the complaint is valid. If a suit is brought against a company after an independent expert verifies there probably wasn’t harassment, then the employer has a better chance of prevailing against the suit.

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You're required to communicate changes to employee benefits

If your company has employees and provides benefits as part of their compensation package, then the Federal Government says that you must inform them of ERISA, COBRA, FMLA and EEOC changes.

Human resources experts are needed

If you do not have an on-staff human resources manager, it’s essential that you have an expert to help you administer and communicate changes to employee benefits.

Don’t make the mistake in believing that your payroll services company will keep you compliant. There are many regulations that have to be followed and businesses are required under the law to inform employees of these changes. Your best course of action is to rely on a human resources specialist.

There are many ways to communicate, from staff meetings, updated pages in Employee Benefit policies, letters and posters that inform employees of their legal rights. If you do not have a formal plan to communicate to employees, call a human resources expert and create a plan to administer the changes to stay compliant with federal regulations.

ERISA Changes

The Pension Protection Act of 2006 requires that pension plans permit non-spouse beneficiaries who received death benefits to roll the plan distributions into another eligible retirement plan.

The Worker, Retiree and Employer Recovery Act of 2008 makes the non-spousal rollover (trustee-to-trustee transfers) mandatory for plan years beginning after December 31, 2009. This means that plans must offer this rollover alternative.

COBRA Subsidy

Employees who were involuntarily terminated through February 28, 2010 will be eligible for the federal COBRA premium subsidy. The 2010 Defense Appropriations Bill includes provisions extending the period for involuntary terminations would allow eligibility, and the time the benefits can be received.

The subsidy provides eligible individuals with 65% subsidy of their premiums for continued coverage under a group health plan for 15 months from the original date of the involuntary termination.

EEOC

Federal regulations require companies to post an updated version of the Equal Employment Opportunity saying that the company does not discriminate based upon genetic information.

In addition to posting this information, you must also provide training to managers and supervisors, and you must also check application and other forms to make sure that none of the questions are requesting information about your applicant’s and employee’s family medical history.

FMLA

The change to the Family Medical Leave Act covers eligible employees and their spouse, son, daughter, parent who are active service members undergoing medical treatment, therapy, recuperation or who are on the temporary disability retired list for a serious injury or illness.

The Defense Authorization Act for 2010 allows for extended military caregiver leave.

Human resources specialists keep you compliant

New Federal regulations say that this information must be communicated to your employees immediately. And, you must be prepared today to apply all of these standards to employees.

Human resources expertise will help you to get all of the policies in order and explain them to your employees.

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Our national government has made healthcare reform a reality. With the passage of two different bills in the House and Senate, and the recent State of the Union Address, the President and congressional body have declared that healthcare reform is a priority.

Although all of the details will be worked out in a special committee who will be appointed by the President, we know that this law will require most employers to offer health insurance and entrepreneurs to carry health insurance. There is no implementation date yet—but it’s wise to plan ahead to avoid mistakes that could cost you in fines and headaches.

Get ready for Human resources changes

If you currently provide health insurance for your employees, at the very least there will be additional paperwork to complete. Either your firm will sign up for the government’s plan or confirm that your firm offers employees insurance that meet the legal limits.

If you do not currently offer your employees health insurance, you must know if you are required to do so under the new law. Your Human Resources Manager or a Human Resources Specialist will need to advise you on the new regulations as soon as the law is passed.

If you’re required to offer employees insurance, you’ll need to offer the government plan or an alternate plan that at least meets the minimal requirements within the timeframe stipulated by the new law. If not, then you’ll likely have to provide documentation that proves that you are not required to carry insurance.

Human resources experts can keep you legal

The new law will require complete knowledge of the statutes to know whether you’re in compliance. Even if the implementation date is a year or two in the future, early planning will help you avoid last-minute mistakes; and cost projections prevent you from being surprised with new expenditures. This additional time allows you to compare plans and select the right plan for your firm and employees.

Then, you must communicate coming changes to your employees. This allows you to manage reactions and expectations. Pre-enrolling staff in a new plan helps you to get all of the changes completed well before the due date.

If you do not have a human resources expert on staff, it’s a good idea to hire a human resources specialist, or better yet, an ASO or PEO (employee leasing company) to help you comply with this complex new law and much more. Plan and take action early to avoid the stress and expense of last-minute changes.

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Healthcare reform has been considered for many years because the number of U.S. citizens who can afford good health care is decreasing. As medical and pharmaceutical costs continue to climb, so does the cost to employers offering heath insurance to employees. Consequently, many employers have discontinued health care coverage, or reduced the services covered to save money.

What is the impact of reform? Most U.S. employers will be compelled to offer health insurance to employees or face a fine. Even self-employed workers are required to carry health insurance. The cost and whether an employer qualifies as a firm required to provide insurance for employees is still to be determined.

The bottom line is all U.S. workers will be covered under health insurance—whether it’s a private plan or the “less expensive” government plan.

What about my current health plan?

Employers will have the choice of carriers. If your employer opts to keep your current insurer, you will be able to keep your coverage and doctors under that plan.

If your employer decides to switch to the government plan, you may have to switch providers.

Will my deductibles and co-pays change under the new law?

The idea behind the new law was to make health care more affordable for individuals and employers. The new law probably will not increase co-pays and deductibles immediately.

I have a pre-existing condition. How will healthcare reform handle that?

Under the new law, you can not be denied health coverage because of a pre-existing condition.

How a human resources firm can help

Insurance coverage and health care reform are complicated issues. If you are an employer who needs guidance on how to integrate the changes in the new law, a local human resources specialist can help.

Human resources firms will have a greater understanding of how to make certain that employers can prepare for the coming reform, comply with the legislation and avoid fines due to non-compliance.

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